The third eBook in the Paid Growth and Campaigns category. It assumes you've read Paid Ads for Small Businesses and decided that a discovery-led channel fits your business better than search. From here it goes deep on the specifics of Facebook and Instagram ads for a small budget: audiences, creative, offers, retargeting and the monthly review that keeps spend honest.
Members ebook·7 chapters· 35 minute read
Chapter 2
Audiences and Targeting
How to define small, real audiences from your existing customer list and warm engagement, and which broad-targeting fantasies to ignore.
Most small business ad accounts spend their first month chasing an audience that doesn't exist. The owner sits with the targeting screen, ticks interests that sound right, layers in a job title, narrows by age, adds a location and stares at the estimated reach number until it feels comfortable. The result is an audience that maps to nobody real - a set of overlapping abstractions that the platform will happily serve ads to, because that's what the platform is paid to do.
There's a calmer way. Most small businesses already have three audiences worth advertising to that they can build directly from their own data and from the people already engaging with their accounts. Those three audiences will outperform any cold-interest combination you can dream up, on a small budget, almost every time. Once they're working, you can build cold audiences that look like them, and the platform can do the heavy lifting because it has a real shape to look for.
This chapter is about those three audiences, in the order you should build them. By the end you'll have a clear short list of who to spend on, and an even clearer list of who not to spend on this quarter.
The full chapter walks through the three real audiences every small business has, how to build them from your existing data and engagement, when to layer in cold targeting and the specific interest combinations that almost always waste money.
Audience one: your existing customers
Upload your customer list as a Custom Audience. Email addresses are the most reliable match, phone numbers help and first name plus surname plus postcode helps the platform find more matches. Anonymise nothing - the platform hashes the data automatically. A list of two hundred customers will typically match two hundred to a hundred and forty real accounts, depending on how many of your customers used the same email address to sign up to the platform.
You won't usually advertise directly to this audience, except for a launch or a retention offer. Its main job is to be the seed for a Lookalike Audience - new accounts that the platform thinks resemble your real customers. That's the most efficient cold audience a small business can build, and it almost always beats anything you'd construct from interests.
Audience two: people who already engage with you
Build a Custom Audience from people who've engaged with your Facebook page or Instagram account in the last year, and another from people who've visited your website in the last ninety days. These are warm. They've already shown some level of interest and they don't yet count as customers. They're the right audience for retargeting - bringing them back to the offer they already half-noticed - and we go deep on that in chapter five.
If your engagement audience is below a few thousand, it'll burn through a small budget fast. That's fine for retargeting - you want frequency on warm people. It's not enough on its own to build a business, which is why audience three matters.
Audience three: lookalikes of audience one
From your customer Custom Audience, create a Lookalike Audience at one per cent of your country - the closest match to your real customers the platform can find. Don't go above three per cent on a small budget - the audience gets bigger but the resemblance gets weaker fast, and you'll start paying for clicks from people who don't match your business.
If your customer list is fewer than a hundred matched accounts, the lookalike won't be reliable. In that case, build the lookalike from your engagement audience instead, accept it'll be less precise and plan to upgrade it once you have a bigger customer list. The earlier eBook Simple Customer List Systems covers how to build that list properly so this audience gets stronger every quarter.
Targeting choices that almost always waste budget
Stacking five or more interests in one ad set
Layering 'and must also match' interests on top of demographics
Targeting an entire country when your business serves one town
Excluding under-25s by reflex without checking your real customer ages
Choosing 'Engaged shoppers' or similar broad behaviours with no business-specific anchor
When cold interest targeting is worth it
Two cases. First, when your audience is genuinely defined by a clear interest or job - a small bookkeeping firm targeting tradespeople in a region, a yoga studio targeting parents within five miles of the studio. In those cases, one or two carefully chosen interests with a strong location and a specific age band can work, especially layered with a lookalike. Second, when your offer is brand new and you have no engagement or customer data yet. Then cold interests give you something to test against until your better audiences mature.
In both cases, keep it small. One or two ad sets, each testing a single audience definition, each with at least ten pounds a day so the platform has enough room to find people. Bigger budgets across more audiences just dilute everything.
Geography and age, honestly
If your business is local, set the radius around your actual catchment, not the wider region. A local service that delivers within twenty miles of a postcode should set a twenty-mile radius, not the whole county. If your business is online and ships nationally, set the country, not three towns you've heard of. Age band should match your real customers - check your customer list, your past enquiries, your guess if you have neither - and widen rather than narrow when in doubt. Most small business audiences are too narrow on age, not too broad.
What to do this week
Export your customer list to a comma-separated file with the columns the platform supports. Upload it as a Custom Audience inside Business Manager. Build the engagement Custom Audience from the last year. Build the website Custom Audience from the last ninety days. Build the one per cent Lookalike from your customer list. Don't launch anything yet - the next chapter is about creative, and creative without a clear audience is wasted no matter how good it is.
Recurring principle: start with the customer. Building audiences from real customers and real engagement is the practical version of that principle. The next chapter, on creative, picks up directly from here.
The rest of this chapter walks through the practical steps, the templates and the checklists you need to put it into action. It includes worked examples, copy frameworks and the small decisions that make the difference between a plan that sits in a drive and one that gets used.
Inside you'll find a step-by-step playbook, a downloadable template, a checklist you can run this week and a short list of common mistakes to avoid before you start.
The full action plan, broken into weekly steps.
Ready-to-use scripts, templates and checklists.
Worked examples for different sized businesses.
Common mistakes and how to avoid them.
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